Appraisals are not always the final word in finding the value of a home and they can come in wide varieties of accuracy. To understand why, read this post from George Souto:

Many efforts have been made to try to ensure better and more accurate Appraisals. While improvements have been made in some areas, holes have been created in others. These ups and downs of the Appraisal Accuracy Can Be A Roller Coaster Ride.

Several efforts have been made to create a reliable, and transparent appraisal process, but this is an on going process. It seems when one problem is solved, the solution creates a new problem in another area. In the early to mid 2000’s appraisals were very lose, properties appraised for values beyond what they probably should have. From the mid to late 2000’s the appraisal process tried to adjust back to more realistic values, but created issues for those who had purchase homes at the height of the market.

In 2009 the “Home Valuation Code of Conduct” (HVCC) was created in an effort to take pressure away from Appraisers from Loan Originators out of the process. While the HVCC took Loan Originators out of the process, it created a “you can’t touch me attitude among Appraisers”, and with the attitude came the under appraisal of properties.

Since the introduction of the HVCC efforts have been made to bring a balance back into the appraisal process, and improve the quality and accuracy of appraisals. A major step to achieving that would be to institute a process to ensure appraisals are performed by Appraisers familiar with the area the appraisal is performed, and not performed by Appraisers who are not familiar with the area.

In my opinion this has been a problem for far to long now, and has caused a needless number of inaccurate appraisals. Ensuring appraisals are not performed by Appraiser who are not familiar with the area they are performing an appraisal in would go a long way in correcting the reason why the Appraisal Accuracy Can Be A Roller Coaster Ride, and finally get the appraisal process back on the right track.